Real estate property taxes in Myrtle Beach

Curious about how property taxes are determined in Myrtle Beach? It's a pretty simple formula now, but many people find it unfair. I'll show you the formula below.

In 2006 the South Carolina legislature changed the procedure for property tax calculation. Why? Because the run-up in the real estate market caused many people's property tax bills to increase dramatically. Of course, these folks were very happy that the value of their property had risen so much. But, as people are wont to do, they complained about paying more taxes on the increases. Everyone wants to go to heaven, but no one wants to die.

So, the legislature, doing what politicians do best, heeded the call and changed the property tax formula to accommodate the property owners. The property tax system was changed to 'point-of-sale' assessment in lieu of periodic reassessements. Now instead of paying the same tax as the previous owner until the next reassessment property buyers pay a totally different property tax than their neighbors who own similar or even identical property. Another aspect of the tax revision is that more weight has been given to getting money for the state to operate from sales taxes.

South Carolina has such a strong tourist industry, why not let visitors pay for the state's expenses? The Legislature decided to tax the folks who have no representation here in addition to the residents who buy the bread. By the way, here's a little pearl of political favoritism most people don't think about. Many years ago, at the request of the automobile dealers in the state, the Legislature capped the sales tax on vehicles at $300. So if you buy a Kia for $17,000 the max you pay is $300. Of course, if you buy a $80,000 Mercedes the max you pay is..... that's right. $300!! I think this is what's called a 'regressive tax'. The wealthy, presumably the ones buying the Mercedes, pay proportionally less in this tax than others. The wisdom of the idea of depending on the whims of consumers is debatable but one thing isn't. When sales volume decreases so does the tax revenue. Voila- budget shortfalls like the ones we're experiencing now. State budget cuts of up to 20%. Don't forget the schools. With so many people moving here with school aged children the need for schools and teachers and all the services they require is not declining. But, the legislature stripped the local school boards of the authority to levy tax millage to meet their needs. So, where do we go from here?

The Legislature made an attempt to amend or modify the property tax policy recently but was unable to. Hopes are high that 2009 will produce a fair and sound property tax policy for the state's residents. We'll see.

Here's the formula to estimate property tax bills when buying real property in SC. Multiply the sales price of the property by your assessment ratio (ie resident @ .04% or second/vacation/investment property @ .06%). Then multiply that number by the specific millage of the district in which the property lies. Here's an example:

A condo on the ocean in North Myrtle Beach selling for $100,000. This condo is being purchased by an out-of-state resident for use as a 2d home.

Purchase price $100,000
Assessment ratio .06
=$6,000
District millage .2228
Tax bill $1336.80

I think it's safe to say no one will ever come up with a tax scheme which everyone accepts as fair. Someone will always feel they pay too much. Until the Legislature modifies the property tax rules, it will be unfair for buyers of property in South Carolina.